Yes! Send me the FREE digital editions of Spa Business and Spa Business insider magazines and the FREE weekly Spa Business and Spa Business insider ezines and breaking news alerts!
Private equity firm Bain Capital Partners doesn’t typically venture into
hospitality, so what was it about the Ooedo Onsen deal that was so appealing
and what are its plans for the hot springs operator? Jane Kitchen reports
By Jane Kitchen | Published in Spa Business 2016 issue 1
Stable market: hot spring bathing is a very traditional form of leisure in Japan / naka-stockphoto/shutterstock.com
In February 2015, private investment firm Bain Capital Partners bought a 100 per cent stake in Japanese hot springs and hotel operator Ooedo Onsen Holdings, in a move to capitalise on tourism ahead of the Tokyo 2020 Olympic Games.
Ooedo Onsen runs a chain of hot springs and hotels – including 23 inns and six onsen theme parks – in Japan employing 3,000 people and attracting 50 million customers a year. The business is on a strong growth trajectory, with sales increasing about 30 per cent year-on-year and a projected turnover of JPY35bn (US295m, €271.4m, £207.1m) in 2015.
One of the leading private equity firms in the world, Bain Capital was co-founded in 1984 by Mitt Romney – later a US presidential candidate. A subsidiary of the company, Bain Capital Ventures, is also a backer of spa software supplier Booker.
Bain doesn’t often invest in travel hospitality, so this move represents a departure for the firm. However, it does have a track record in consumer services, having grown chains such as Burger King and Domino’s Pizza. It saw great potential in Ooedo and was confident that it was the firm to help develop it.
Scaleable business Onsen – Japan’s take on hot springs – are an important part of Japanese culture, with thousands of locations throughout the country due to natural volcanic waters.
The Ooedo Onsen chain originated from Tokyo’s large-scale onsen theme park, Odaiba Ooedo Onsen Monogatari, which houses a variety of baths using water from natural hot springs whose source is located 1,400m under ground.
As well as multiple baths and thermal experiences, the theme park includes an Edo-era theme festive mall and multiple restaurant choices. Spa treatments, including massages, exfoliation, reflexology and fish foot therapy are also available. Entry costs range from JPY1,000 (US$8, €7.5, £5.5) for four to 12-year-olds and go up to JPY2,680 (US$22, €20, £14.5) for adults at the weekend.
“This is a very scalable business,” David Gross-Loh, MD of Bain Capital, tells Spa Business. “Ooedo Onsen has enormous growth potential, both in existing branches and through expansion. There’s a lot that Bain Capital is equipped to help with, including looking at the cost base and finding ways to improve it, looking at pricing, and looking at how we attract and retain customers.”
Gross-Loh feels Bain’s experience working with retail chain operations will also help it optimise and grow the hot spring business. “In Japan, we’ve found that many businesses in this industry are facing founder succession and transition issues,” he says. “We leverage our industry expertise, deal track record, experience and scale to partner with business.”
Favourable market Gross-Loh points out that onsen are a very traditional form of leisure in Japan, with over 400 years of history, which in itself provides a very stable market. And with consumers aged 50+ accounting for 50 per cent of the total hot spring business, Japan’s ageing population makes for a favourable demographic shift.
“We developed a very close relationship with the founder for three years prior to the deal, so this is a business [and market] that we had come to know extremely well,” says Gross-Loh.
Another advantage is that the Japanese government has positioned tourism as a core growth strategy. Gross-Loh believes this will give Ooedo Onsen the opportunity to capture demand from the growing inbound tourism market.
Expansion plans Bain has started building out the pipeline of new sites and has identified and conducted due diligence on 17 new sites over the past few months. It has also built and implemented a strategy to drive growth, profitability and market share.
“This covers a few areas – pricing, marketing and cost optimisation – to ensure we are effectively allocating our resources,” says Gross-Loh.
The company has also added to the existing management at Ooedo Onsen and continues to do so; currently, it’s looking for a chief acquisition officer to help with the expansion.
With the 2020 Olympic Games set to take place in Tokyo, Bain is keeping its eye on the prize.
“If you consider that the number of tourists travelling to Japan grew from 6 million in 2004 to 13 million in 2014, then you can already see the scale of the opportunity,” says Gross-Loh. “In 2020, Japan expects to receive 20 million visitors.”
Read more from this issue of Spa Business magazine
Interview: Kenneth Ryan
Marriott’s global head of spa talks exclusively to Katie Barnes about the new ‘game-changing’ Ritz-Carlton Spa brand and market domination
Promotional feature: Steve Kass Consulting
Steve Kass, founder and former CEO of American Leisure, has launched a new business, Steve Kass Consulting. The global leader explains his goals as an innovative concept and design creator
Research: Work it out
Ophelia Yeung gives a sneak preview of a new study on workplace wellness that debuts later this month
Fitness: Competitive edge
Could a touch of rivalry help spas to engage more people in fitness? Niamh Madigan finds out
Promotional feature: Ojmar
A growing number of spa operators across the UK are working with Ojmar to upgrade their traditional keyed locking systems to electronic solutions
Private equity firm Bain Capital Partners doesn’t typically venture into
hospitality, so what was it about the Ooedo Onsen deal that was so appealing
and what are its plans for the hot springs operator? Jane Kitchen reports
By Jane Kitchen | Published in Spa Business 2016 issue 1
Stable market: hot spring bathing is a very traditional form of leisure in Japan / naka-stockphoto/shutterstock.com
In February 2015, private investment firm Bain Capital Partners bought a 100 per cent stake in Japanese hot springs and hotel operator Ooedo Onsen Holdings, in a move to capitalise on tourism ahead of the Tokyo 2020 Olympic Games.
Ooedo Onsen runs a chain of hot springs and hotels – including 23 inns and six onsen theme parks – in Japan employing 3,000 people and attracting 50 million customers a year. The business is on a strong growth trajectory, with sales increasing about 30 per cent year-on-year and a projected turnover of JPY35bn (US295m, €271.4m, £207.1m) in 2015.
One of the leading private equity firms in the world, Bain Capital was co-founded in 1984 by Mitt Romney – later a US presidential candidate. A subsidiary of the company, Bain Capital Ventures, is also a backer of spa software supplier Booker.
Bain doesn’t often invest in travel hospitality, so this move represents a departure for the firm. However, it does have a track record in consumer services, having grown chains such as Burger King and Domino’s Pizza. It saw great potential in Ooedo and was confident that it was the firm to help develop it.
Scaleable business Onsen – Japan’s take on hot springs – are an important part of Japanese culture, with thousands of locations throughout the country due to natural volcanic waters.
The Ooedo Onsen chain originated from Tokyo’s large-scale onsen theme park, Odaiba Ooedo Onsen Monogatari, which houses a variety of baths using water from natural hot springs whose source is located 1,400m under ground.
As well as multiple baths and thermal experiences, the theme park includes an Edo-era theme festive mall and multiple restaurant choices. Spa treatments, including massages, exfoliation, reflexology and fish foot therapy are also available. Entry costs range from JPY1,000 (US$8, €7.5, £5.5) for four to 12-year-olds and go up to JPY2,680 (US$22, €20, £14.5) for adults at the weekend.
“This is a very scalable business,” David Gross-Loh, MD of Bain Capital, tells Spa Business. “Ooedo Onsen has enormous growth potential, both in existing branches and through expansion. There’s a lot that Bain Capital is equipped to help with, including looking at the cost base and finding ways to improve it, looking at pricing, and looking at how we attract and retain customers.”
Gross-Loh feels Bain’s experience working with retail chain operations will also help it optimise and grow the hot spring business. “In Japan, we’ve found that many businesses in this industry are facing founder succession and transition issues,” he says. “We leverage our industry expertise, deal track record, experience and scale to partner with business.”
Favourable market Gross-Loh points out that onsen are a very traditional form of leisure in Japan, with over 400 years of history, which in itself provides a very stable market. And with consumers aged 50+ accounting for 50 per cent of the total hot spring business, Japan’s ageing population makes for a favourable demographic shift.
“We developed a very close relationship with the founder for three years prior to the deal, so this is a business [and market] that we had come to know extremely well,” says Gross-Loh.
Another advantage is that the Japanese government has positioned tourism as a core growth strategy. Gross-Loh believes this will give Ooedo Onsen the opportunity to capture demand from the growing inbound tourism market.
Expansion plans Bain has started building out the pipeline of new sites and has identified and conducted due diligence on 17 new sites over the past few months. It has also built and implemented a strategy to drive growth, profitability and market share.
“This covers a few areas – pricing, marketing and cost optimisation – to ensure we are effectively allocating our resources,” says Gross-Loh.
The company has also added to the existing management at Ooedo Onsen and continues to do so; currently, it’s looking for a chief acquisition officer to help with the expansion.
With the 2020 Olympic Games set to take place in Tokyo, Bain is keeping its eye on the prize.
“If you consider that the number of tourists travelling to Japan grew from 6 million in 2004 to 13 million in 2014, then you can already see the scale of the opportunity,” says Gross-Loh. “In 2020, Japan expects to receive 20 million visitors.”
Read more from this issue of Spa Business magazine
Interview: Kenneth Ryan
Marriott’s global head of spa talks exclusively to Katie Barnes about the new ‘game-changing’ Ritz-Carlton Spa brand and market domination
Promotional feature: Steve Kass Consulting
Steve Kass, founder and former CEO of American Leisure, has launched a new business, Steve Kass Consulting. The global leader explains his goals as an innovative concept and design creator
Research: Work it out
Ophelia Yeung gives a sneak preview of a new study on workplace wellness that debuts later this month
Fitness: Competitive edge
Could a touch of rivalry help spas to engage more people in fitness? Niamh Madigan finds out
Promotional feature: Ojmar
A growing number of spa operators across the UK are working with Ojmar to upgrade their traditional keyed locking systems to electronic solutions
Private hotel owner and developer HVL Hotels will open a new luxury resort and tourism
destination called Laval Hunter Valley in the second half of 2027 in Pokolbin, Australia.
The annual wellness festival dedicated to wellbeing, culture, longevity and human connection,
called Alma, will be hosted by Rocco Forte hotel, Verdura Resort in Sicily, Italy.
Capella Hotel Group has appointed Feisal Jaffer as chief development officer as the company
ramps up its global expansion of both its Capella and Patina brands.
People taking GLP-1 weight loss medications such as Ozempic, Wegovy, Mounjaro and Zepbound
may be losing weight, but they’re also becoming less physically active, according to new
research presented at the ENDO 2026 annual meeting of the Endocrine Society
Abu Dhabi-based investment firm Mubadala Capital has made a binding, fully financed
€1 billion
offer to acquire Pierre and Vacances SA, the European holiday resort operator behind the
continental European Center Parcs business.
Global retreat trade show, Synergy The Retreat Show, has launched a resource called The
Source, which hosts an open-access online Transformation Series programme.
The Standards Authority for Touch in Cancer Care (SATCC) charity has announced its first five-
day Living with Cancer and Beyond retreat, which will be held at Carden Park Hotel and Spa in
Cheshire, UK, between 1 and 5 September.
Patmos Aktis, a Luxury Collection Resort and Spa, has opened in Greece, with a renovated and
rebranded wellness offering called Ansana Wellness and Spa.
The Mauna Kea Beach Hotel, an Autograph Collection property in Hawaii, US, has opened its
22,000 sq ft indoor-outdoor Spa at Mauna Kea as the final step in the property’s overall
renovation, which has cost more than US$180 million (€166 million, £140 mill
The UK spa review and discovery platform for consumers, the Good Spa Guide, has announced
it will host the Good Spa Guide Awards 2026 during an event on 16 November at Sopwell House
Hotel in St Albans, UK.
